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    Report - Material Management

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    Anne Bernadette Sumugat
    A distribution channel is the chain of businesses that move a good from manufacturer to consumer. It can include wholesalers, retailers, distributors, and the internet. Distribution channels are either direct, with no intermediaries between manufacturer and consumer, or indirect, using middlemen like wholesalers or retailers. Longer distribution channels with more intermediaries can increase costs to consumers but also provide more ways for consumers to access goods. Common intermediaries include wholesalers, who buy and resell bulk goods, and retailers, who sell directly to consumers. The internet has also become an important distribution channel for manufacturers.

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    Report - Material Management

    Uploaded by

    Anne Bernadette Sumugat
    33 views16 pages
    A distribution channel is the chain of businesses that move a good from manufacturer to consumer. It can include wholesalers, retailers, distributors, and the internet. Distribution channels are either direct, with no intermediaries between manufacturer and consumer, or indirect, using middlemen like wholesalers or retailers. Longer distribution channels with more intermediaries can increase costs to consumers but also provide more ways for consumers to access goods. Common intermediaries include wholesalers, who buy and resell bulk goods, and retailers, who sell directly to consumers. The internet has also become an important distribution channel for manufacturers.

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    A distribution channel is the chain of businesses that move a good from manufacturer to consumer. It can include wholesalers, retailers, distributors, and the internet. Distribution channels are either direct, with no intermediaries between manufacturer and consumer, or indirect, using middlemen like wholesalers or retailers. Longer distribution channels with more intermediaries can increase costs to consumers but also provide more ways for consumers to access goods. Common intermediaries include wholesalers, who buy and resell bulk goods, and retailers, who sell directly to consumers. The internet has also become an important distribution channel for manufacturers.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    33 views16 pages

    Report - Material Management

    Uploaded by

    Anne Bernadette Sumugat
    A distribution channel is the chain of businesses that move a good from manufacturer to consumer. It can include wholesalers, retailers, distributors, and the internet. Distribution channels are either direct, with no intermediaries between manufacturer and consumer, or indirect, using middlemen like wholesalers or retailers. Longer distribution channels with more intermediaries can increase costs to consumers but also provide more ways for consumers to access goods. Common intermediaries include wholesalers, who buy and resell bulk goods, and retailers, who sell directly to consumers. The internet has also become an important distribution channel for manufacturers.

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    © All Rights Reserved
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    Download as pptx, pdf, or txt
    of 16

    MATERIAL

    MANAGEMENT

    Distribution Channel
    Anne Bernadette L Sumugat
    What is a Distribution Channel?
    A distribution channel is a chain of businesses or
    intermediaries through which a good or service passes
    until it reaches the final buyer or the end consumer.
    Distribution channels can include wholesalers, retailers,
    distributors, and even the Internet.
    Distribution channels are part of the downstream
    process, answering the question "How do we get our
    product to the consumer?" 
    Understanding Distribution Channels
    A distribution channel is the path by which all goods
    and services must travel to arrive at the intended
    consumer. Conversely, it also describes the pathway
    payments make from the end consumer to the original
    vendor. Distribution channels can be short or long, and
    depend on the amount of intermediaries required to
    deliver a product or service.
    Goods and services sometimes make their way to
    consumers through multiple channels—a combination
    of short and long. Increasing the number of ways a
    consumer is able to find a good can increase sales. But
    it can also create a complex system that sometimes
    makes distribution management difficult. Longer
    distribution channels can also mean less profit each
    intermediary charges a manufacturer for its service.
    Goods and Services = Fire-Safe Community

    Distribution Channel = (OLP) Oplan Ligtas na


    Pamayanan
    Types of Distribution Channels
    Channels of distribution are broken into two
    different forms—direct and indirect. Indirect
    channels can further be divided into one-level, two-
    level, and three-level channels based on the number of
    intermediaries between manufacturers and customers.
    A direct channel allows the consumer to make
    purchases from the manufacturer while an indirect
    channel allows the consumer to buy the good from a
    Intermediaries
    Intermediaries are the middlemen and signify
    those individuals in the channels that either take title
    to take goods and sell at profit.
    They are directly involved in process of flow of
    goods from manufacturer to consumer.
    Generally, if there are more intermediaries
    involved in the distribution channel, the price for
    a good may increase. Conversely, a direct or
    short channel may mean lower costs for
    consumers because they are buying directly from
    the manufacturer.
    Types of Intermediaries
    1. Merchant middlemen
    i. Wholesalers
    ii. Retailers
    2. Agents
    i. Brokers
    ii. Commission agents
    iii. Selling agents
    iv. Factors
    v. Clearing agents
    vi. Auctioneer
    Wholesalers
    Wholesalers buy the goods from the producers directly. One
    important characteristic of wholesalers is that they buy in bulk
    at a lower rate than retail price. They store and warehouse
    huge quantities of the products and sell them to other
    intermediaries in smaller quantities for a profit.
    Wholesalers generally do not sell to the end consumer
    directly. They sell to other middlemen like retailers or
    distributors.
    Retailers
    Retailers are basically shop owners. Whether it is your local
    grocery store or the mall in your area they are all retailers. The only
    difference is in their sizes. Retailers will procure the goods from
    wholesaler or distributors and sell it to the final consumers. They
    will sell these products at a profit margin to their customers.
    In the reality of the market, all producers rely on the distribution
    to channel to some extent. Even those who sell directly may rely on
    at least one of the above intermediary for any purpose. Hence the
    distribution channel is of paramount importance in our economy.
    Agents
    Agents are middlemen who represent the producers
    to the customers. They are merely an extension of the
    company but the company is generally bound by the
    actions of its agents. One thing to keep in mind, the
    ownership of the goods do not pass to the agents, they
    only work on fees and commissions.
    Dual Distribution
    When a manufacturer uses more than one marketing
    channel simultaneously to reach the end user, he is said to be
    using the dual distribution strategy. They may open their own
    showrooms to sell the product directly while at the same time
    use internet marketplaces and other retailers to attract more
    customers.
    A perfect example of goods sold through dual distribution
    is smartphones.
    The Internet as a Distribution Channel
    The internet has revolutionized the way manufacturers
    deliver goods. Other than the traditional direct and indirect
    channels, manufacturers now
    use marketplaces like Amazon (Amazon also provide
    warehouse services for manufacturers’ products), Lazada,
    Shopee and other intermediaries like aggregators
    (Grab, Honestbee) to deliver the goods and services.

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